Simple Interest
Math MCQs

Question :    Calculate the amount due if Christopher borrowed a sum of $4000 at 4% simple interest for 4 years.

Correct Answer  $4640

Solution & Explanation

Solution

Given,

Principal (P) = $4000

Rate of Simple Interest (SI) = 4%

Time (t) = 4 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% per annum.

Method (1) Using Formula

Calculation of Simple Interest

Formula to Calculate Simple Interest

Simple Interest (SI) = Principal × Rate × Time

Thus, Simple Interest (SI) = $4000 × 4% × 4

= $4000 ×⁴/₁₀₀ × 4

= ^{4000 × 4 × 4}/₁₀₀

= ^{16000 × 4}/₁₀₀

= ⁶⁴⁰⁰⁰/₁₀₀

= $640

Thus, Simple Interest = $640

Calculation of Amount

The total money paid to the lender by a borrower is called the Amount.

In other words, sum of priciple and interest is called the Amount.

Formula to Calculate the Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $640

= $4640

Thus, Amount to be paid = $4640 Answer

Method (2)

Calculation of Amount when Principal, Rate of Simple Interest and Time are given

Calculation of Amount directly using Principal, SI, and Time

Formula to calculate the Amount

Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)

⇒ A = P + PRT

Here in the question, P = $4000

Rate of Simple Interest (SI) or (R) = 4%

And, Time (t) = 4 years

Thus, Amount (A)

= $4000 + ($4000 × 4% × 4)

= $4000 + ($4000 ×⁴/₁₀₀ × 4)

= $4000 + (^{4000 × 4 × 4}/₁₀₀)

= $4000 + (^{16000 × 4}/₁₀₀)

= $4000 + (⁶⁴⁰⁰⁰/₁₀₀)

= $4000 + $640 = $4640

Thus, Amount (A) to be paid = $4640 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 4%

This, means, $4 per $100 per year

∵ For $100, the simple interest for 1 year = $4

∴ For $1, the simple interest for 1 year = ⁴/₁₀₀

∴ For $4000, the simple interest in 1 year

= ⁴/₁₀₀ × 4000

= ^{4 × 4000}/₁₀₀

= ¹⁶⁰⁰⁰/₁₀₀ = $160

Thus, simple interest for 1 year = $160

Therefore, simple interest for 4 years

= Simple interest for 1 year × 4

= $160 × 4 = $640

Thus, Simple Interest (SI) = $640

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $640

= $4640

Thus, Amount to be paid = $4640 Answer

Similar Questions

(1) Find the amount to be paid if Sarah borrowed a sum of $5850 at 10% simple interest for 7 years.

(2) Find the amount to be paid if Jessica borrowed a sum of $5750 at 4% simple interest for 8 years.

(3) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.

(4) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $8965 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due if John borrowed a sum of $3200 at 3% simple interest for 3 years.

(6) Mary had to pay $3233 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(7) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 3% simple interest?

(8) Find the amount to be paid if Mary borrowed a sum of $5050 at 8% simple interest for 8 years.

(9) Calculate the amount due if Michael borrowed a sum of $3300 at 4% simple interest for 3 years.

(10) Karen had to pay $4305.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.